July 9, 2012
Use Financial Windfalls Wisely
What should you do with the next financial windfall that comes your way? Find out how to use unexpected income so it benefits you in the long-term.
Lottery jackpots aside, many of us experience a financial windfall from time to time, whether it's a tax refund, a bonus or an inheritance. Before going on a spending spree, weigh existing debts, upcoming expenses and future needs to make sure you apply the money where it's needed most.
- Pay down a portion of outstanding debt on credit cards and loans.
- Beef up your emergency fund so you can cover at least six months of living expenses.
- Increase your 401(k) contribution, especially if there's an employer match.
- Open a 529 college savings plan for your kids or grandkids.
Bottom line: Don't just waste your windfall on something frivolous – put it to work for your long-term benefit.
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